Choosing Your Boat / Yacht Insurance
Seaworthiness of a vessel
Our recommended surveyors are:
(a) Capt Kang
Horsburgh Marine Services Pte Ltd
(b) Capt Bird
Tel No. 63567396
Tips on Choosing Your Boat Insurance
Some boat owners purchase insurance because it is a compulsory requirement by the Maritime and Port Authority of Singapore (MPA). One thing that really impresses me is that most boat owners realise the importance of transferring all their financial risk to the insurer and will choose to purchase a comprehensive boat insurance for their boats.
As a professional boat insurance agent, I would encourage all my clients to consider buying a comprehensive boat insurance based on the agreed fair market value of the boat, rather than on a lower value. Reason being, as a boat owner, damages covered by your insurer will be compensated to as high as your insured value. For example, if the boat sinks and is beyond economical repair, you may seek insurance claim for the cost of replacing your boat up to the insured value. It might also include expensive charges like removing the wreck of a sunken boat from the sea bed, if required by the MPA or other government authorities.
Other important factors to look at are the financial strength, core product and the support of your insurer. You may check out their financial strength ratings by agencies like Standard & Poor’s, Moody’s and Fitch. There are about 38 general insurers in Singapore offering highly competitive insurance products. It is important you seek out the strength, not just the insurance premium. Also consider who is your insurance adviser and the company behind the adviser. Investing in a boat is a long term commitment to many, and it is wise to work with a long term partner who can help you to protect your boat with the right insurance coverage.
There are always two sides to every coin. Knowing the benefits of your insurance policy is only the first step. You should either try to read the insurance contract or seek professional advice from the adviser about the following clauses in the boat insurance contract, namely:
- Liabilities to third parties
- Excess and deductible
- Salvage charges
- Duty of Assured
- Unrepaired damage
- Constructive total loss
- Speedboat clause
- Cancellation and return of premium,
- Other exclusions
Like buying the insurance for your car, premium for boat insurance are affected by several factors. The underwriters of the insurance companies will base on the following factors to work out a reasonable premium for boat owner – insured value, length of boat; age, type of boat (i.e. powered or sail), type of engine(s), mooring location, intended area of navigation, previous boating experience, claim history of the owner and deductible amount. Sometimes the underwriter will also consider the automobile driving record of the owner(s), and whether they have taken any safe boating courses.
To sum up, it is important to get the right insurance for your dream boat. Buy it with reasonable amount of understanding. Buy it through a trusted insurance adviser to ensure your dream stays “well protected”.
Captain (NAVY, NS) Andrew ANG(AEPP, AFC, AIFP, B. (1st Class Hons) E. Eng, Cert SCI (GI, LI, HI), CLU, ChFC, FChFP, MFSP, NLP Trainer & Consultant, JobEQ consultant)
Raffles Provident LLP
Hp: 8448.7168; Office: 3112 1488 ; Fax: 3145 7168
* this article was published on BOAT Asia 2013 magazine
Extract from the MPA website
- Insurance Policy
- Applicable to all mechanically-propelled pleasure craft equipped with outboard or auxiliary engine, and non-mechanically pleasure craft which are 7 metres and above in length. The policy must cover the third party liabilities including wreck removal, personal injuries, etc. e.g. under Clause 11 of the Institute Yacht Clauses (IYC) (1/11/85). The minimum sum insured is S$25,000/- for any one accident or occurrence. It should cover the period up to the next expiry date of the craft licence. The insurance company must be a Singapore-registered company. If the insurance company is a foreign one, a letter from the local representing office confirming same must be submitted.
Buying for the right coverage?
Some may say that buying boat/yacht insurance is quite similar to buying a motor car insurance. However, I’ll say it’s a lot more than buying a motor car insurance. When the car stops working, you can easily get someone to tow it back to the car workshop. When you’re out at the sea, there are also many factors like wind speed, sea current, and the unpredictable sea weathers, especially with the recent terrible climate changes. I am speaking as a long term sailor who has sailed with the Singapore Navy for more than a decade. I was a Navy Captain and even the Naval ships were subjected to all these factors.
Just recently, a less than 1-year-old, nice looking yacht, sank in Singapore water. The yacht owner, having the penny wise and pound foolish mentality, chose not to insure his own expensive yacht to save money. If this can happen in the sheltered and relatively safe water like Singapore water, think about the consequences where our neighbour has sank more than 300 boats recently, for fishing in their water territory. Water territory is not like land territory, where you can be 100% sure that you are in Singapore or out of Singapore.
Also, we are in an infamous water piracy place, known as the Piracy in the Strait of Malacca. Many boat/ yacht owners probably didn’t know that this is not only the world’s top water piracy places – it’s also an ultra long 900km sea lane.
Another factor many boat/ yacht owners only realise when they start sending their boat/ yacht for repair work is that in Singapore, we don’t have many professional engineers or technicians to service or repair your broken down boat/ yacht, unlike the Europe, USA and Australia. This means that the repair cost will not be as reasonable as what most are expecting. I was an engineer by training and I did some practice professionally in the Marine industry myself some years ago. My sincere advice is talk to the REAL experience people before choosing your next boat/ yacht. Be sure you are covering your crew with the compulsory insurance required under the workers injury compensation act, cover your passengers, as well as your own personal liability.